B'luru set to retain top slot in office space demand: JLL CEO

At a time when corporate real estate is facing uncertainty owing to the new wave of workforce as well as workspaces, Bengaluru will remain the champion for office space demand in India, opined JLL CEO and Country Head Ramesh Nair.

While 2016 saw office space absorption in excess of 12 million sq feet, the first quarter of 2017 witnessed 1.57 million sq feet being absorbed.

Despite the fact that the city’s demand-driver — the IT industry — facing tumultuous times, Nair said, “Bengaluru has the maximum tech demand in the country. In some years, we have even seen 13 million sq feet of office space getting absorbed in Bengaluru. I don’t see Bengaluru moving away from the No 1 spot anytime soon.”

Talking about the impact of coworking spaces, Nair said, “JLL’s take is, globally, in the next few years, coworking, accelerators, incubators, what we call as liquid spaces could contribute to 25-30% of overall office demand in India. Some markets in the US, 20-30% of total office space demand is going into coworking spaces already.”

Last year, at a total of 35 million sq feet of office space absorption in India, coworking spaces absorbed up to 3% i.e. one million sq feet.

“In fact, some of our clients are participating in demand for office space in Bengaluru. JLL has a strategy — to have a headquarters in some cities and touchdown offices in coworking spaces, as corporates are looking at coworking spaces now.” he said on the sidelines of CoreNet Global’s fourth annual India conference here. 

While Bengaluru scores high on talent, there are still many limitations that the city poses. Over the past few years, the biggest beneficiaries of Bengaluru’s infrastructure problems have been Hyderabad, Chennai and Pune, all of which saw record absorption last year.

Nair said, “Bengaluru needs to find solutions. The Karnataka government has to focus on creating more connectivity with metros and fixing the peripheral road. If traffic issues can be adressed, Bengaluru will have a much better standing.”

“Otherwise, Bengaluru scores over other cities in terms of real estate availability, real estate cost, tech-talent and salary costs as well,” he added.

On the other hand, with respect to RERA, there is massive confusion all over the country, he said.
“I think the central government need to take stock to resolve the confusion. Maharashtra has done a good job, and other state governments need to learn from the Maharashtra model. The central government needs to make sure that there is uniformity in RERA implementation across the country,” he asserted.